Registration of the company under the VAT Act

Updated last 26.03.2021

When is registration under the Value Added Tax Act necessary?

Any individual, performing independent economic activity, or firm (company) may register under the VAT Act (VATA). There are some major types of registrations provided for by law, as follows:

• Compulsory VATA registration – all persons/entities should register compulsory, if their turnover has exceeded BGN 50 000 during the last 12 months. When the turnover of BGN 50,000 is reached for a period not longer than two consecutive months, including the current one, the application for VAT registration should be submitted upon reaching the turnover. In the case of consecutive performance of a homogeneous activity in the same commercial site by two or more related parties or persons acting in concert, the taxable turnover of each subsequent person shall include the turnover realized in the site by all persons who performed the activity in the respective site before it, for a period not longer than the last 12 consecutive months, including the current month, and shall be considered as a turnover realized by the respective person on the first day of starting the homogeneous activity in the site by this person. Additional information providing clarifications as to the compulsory registration is available here;
• Other types of VAT registration – all taxable persons are subject to mandatory VAT registration: who receive services with a place of performance in the country from foreign companies (Art. 97a, para 1); who provide services to taxpayers in EU member states (Art. 97a, para 2); upon transformation of an entity registered under the VAT Act (Art. 132); in case of inheritance of a person registered under the VAT Act (Art. 132a); in case of realized intra-community acquisitions worth over BGN 20,000 (Art. 99); registration for the application of a regime in the Union in the provision of services or distance sales of goods to non-taxable persons (natural persons) residing in another Member State (Art. 156)[1].
• Voluntary VATA registration – even if the compulsory registration terms and conditions are not in place, you have the right to register under VATA voluntarily – at your own initiative. The voluntary VATA registration benefits you when you purchase goods and / or services from persons that are also VATA registered. In this case you may receive a VAT refund for the tax paid upon the purchase of the goods / service or you can deduct it against your VATA payables. Additional information on the voluntary registration is available here.

What is the registration procedure?

In order to initiate the registration procedure, you have to file a registration application in a standard form to the competent territorial directorate of the National revenue Agency (NRA). The application template is available at the website of the NRA. The filing of the application is free of charge. The following documents are attached to the registration application:

• Schedule of the taxable turnover by month for the last 12 months preceding the current month, and when the turnover is reached for a period shorter than two consecutive months, including the current month. The schedule also includes the taxable turnover for the current month up to the date when the turnover of BGN 50 000 was reached;
• Schedule of the total amount of taxable intra-Community acquisitions for the current year, excluding the acquisition of new motor vehicles and goods subject to excise duty.

The filing of the application may be performed electronically. To do that you need a qualified electronic signature (QES).

If the conditions for compulsory registration exist and you do not file an application, you will be registered by compulsion at the initiative of the NRA and you will be subject to material sanction amounting between BGN 500 and BGN 50 000.The law allows for optional registration when applying for entry of an initial registration of a trader before the Registry Agency. This is a simplified administrative procedure, which allows voluntary registration under the VAT Act, which can be requested at the time of the application for entry of the trader in the Commercial Register and the register of non-profit organizations at the Registry Agency. In this case the person declares his wish for voluntary registration in the Application for initial registration and has no obligation to apply the reports on the taxable turnover and the intra-community acquisitions.

After the registration, you will be receive a registration act, , and in case you ask for you will receive also a registration certificate. you lose, damage or destroy the certificate, you are obliged to notify the respective territorial directorate of the NRA and a duplicate copy will be issued to you.